Bain targets $2bn for second Asia fund

The firm is ‘seriously considering’ offering investors a choice between lower management fees or lower carry, sources have confirmed.

Boston-headquartered Bain Capital is a few months away from formally launching the fundraising for its second Asian fund, industry sources have confirmed to PE Asia. The fund will have a $2 billion target. 

Bain declined to comment.

The firm is “seriously considering” offering investors a choice between lower management fees or lower carried interest on the fund, said one source. The choice would be between paying a 2 percent management fee with 20 percent carry and 1 percent management fee with 30 percent carry. Bain has traditionally received a 2 percent management fee and 30 percent carry for its funds.

Many investors are pushing for fund structures that incorporate a lower management fee and higher performance payout. However, one source added that the fund's terms had not been finalised.

With this second Asia fund Bain will expand its investment remit to include India, as well as China and Japan, where its predecessor currently invests, said another source. Although Bain has already made two investments in India, including the $61 million investment in Lilliput Kidswear last year, these have to-date been made from Bain’s global funds.

Bain’s maiden Asia vehicle, which closed on $1 billion in 2007, is currently about 60 percent deployed across eight deals.

Earlier this month, Bain and Singaporean sovereign wealth fund GIC announced plans to invest in India’s largest motorcycle maker as part of a deal worth $851.8 million.

Last week, the firm was reported to be in negotiations with Nomura Holdings to buy Japanese restaurant chain Skylark for ¥280 billion (€2.5 billion; $3.4 billion) including debt.